June 2012

By Dan Koeppel
T. Rowe Price

The age of Thomas Edison was supposed to come to an end on January 1, 2012. That’s when the Energy Independence and Security Act of 2007—a congressionally mandated ban on incandescent light bulbs—was meant to go into effect.

Instead, the act became a political cause, used as an example of government interference in consumer choice and the free market. And in the final weeks of 2011, it was blocked: the budget agreement between Congress and the Obama administration included a delay in enforcing the law.

The block extends only through the end of 2012, and attempts on both the federal and local levels are now being made to reverse the ban permanently. But the experts are in agreement: the incandescent is becoming obsolete, they say, destined to be replaced by more efficient and environmentally sound alternatives that are already on store shelves.

Here is what you need to know about where lighting technology has come, and where it’s going.


First things first: Edison’s 125-year-old technology has some major flaws. Incandescent bulbs produce light via a filament that glows when electricity heats it. The light is attractive to many eyes, but the bulbs don’t last long—bout 1,500 hours maximum—and they’re inefficient, with roughly 90 percent of the energy they consume given off as heat, rather than light.

The U.S. Department of Energy estimates that replacing a single 100-watt incandescent bulb with a comparably powered CFL bulb saves a consumer about $6 overall, and energy devoted to lighting could be cut by as much as 80 percent if more efficient bulbs were adopted.


The most widely used alternative to incandescents today is the spiral-shaped compact fluorescent lamp, or CFL, which is filled with gas that creates light when electrons from the power source flow into the tube and collide with the gas molecules.

lighting optionsThe product is an engineering marvel, invented in 1974 by Ed Hammer, then an engineer at General Electric. Fluorescents usually needed to be long to work properly, which is why they mostly appeared in large spaces like warehouses and schools, but Hammer found a solution in the bulb’s spiral shape. Creating them, however, involved painstakingly heating and curling glass tubes by hand, and General Electric ultimately shelved the project. It wasn’t until the 1990s that GE competitor Philips, today the world’s largest lighting manufacturer, introduced the first successful version of the product, called the "Tornado" bulb.

CFLs are still more expensive than incandescents. But according to Michael Siminovitch, director of the Lighting Technology Center at the University of California Davis, because they last longer and require far less electricity to produce light, they should—in theory—pay for themselves. Nonetheless CFLs have acquired a bad reputation. For starters, Siminovitch says, there were exaggerated longevity claims early on, and more importantly, the bulbs don’t dim, they produce an unnaturally colored light that doesn’t appeal to many consumers, and they contain toxic mercury.

The waste issues associated with mercury are now being remedied by disposal initiatives, such as the bulb return programs offered by Home Depot, as well as consumer education on how to handle broken bulbs. (The Environmental Protection Agency’s how-to document for handling a broken CFL is three pages long). But those hassles may mean the bulb’s reputation is unrecoverable, says Siminovitch.


Perhaps the most promising new lighting technology is light-emitting diodes, or LEDs. Unlike incandescents and CFLs, LEDs are digital—they’re based in circuitry—and they are easier to dispose of and longer-lasting than CFLs.

They’re also expensive (currently starting at about $20 per bulb) and heavy, and they run hot to the touch, enough so that currently available products require unattractive cooling methods like heat-dissipating fins.

The U.S. Department of Energy has encouraged the adoption of LED bulbs by offering bounties to companies that create products meeting a set of criteria designed to avoid the problems with CFLs. In 2011, the L-Prize (a government-sponsored technology competition) was awarded to Philips, which became the first company to introduce a relatively dimmable LED bulb that produced light equivalent to that of a 60-watt incandescent.

The Philips product remains unproven. Nobody knows how long they’ll last in real-world usage, and with bulbs costing as much as $50, few consumers have shown a willingness to make a leap of faith. Home Depot, the country’s largest lighting retailer, doesn’t appear to be terribly optimistic. "I don’t want to say it’s exorbitant, but if a customer is only looking at the price, they could come to that conclusion," Brad Paulsen, the company’s manager for lighting products, told The Washington Post in March 2012.

Yet LEDs are following an innovation curve akin to other high-tech items like computers and digital cameras. Basically, LEDs are semiconductors, and like all solid-state technology, they tend to get better and cheaper as time passes. In 1999, a researcher named Roland Haitz, then heading up semiconductor R&D at Hewlett-Packard, coauthored a paper that became the lighting industry’s manifesto. By charting the historical prices of LEDs and projecting forward, Haitz estimated that the amount of light they produced would increase by a factor of 20 per decade, while the cost would correspondingly drop by a factor of 10.

lighting optionsAs with Moore’s Law, which predicted decreasing prices for increasing computer power, Haitz’s Law has played out in the marketplace. Right now, Haitz says, LEDs are on the verge of widespread affordability, and if consumers were willing to factor in long-term savings and look at LED bulbs as an investment, they’d embrace them.


The first wave of forms after LEDs will likely use organic LEDs, or OLEDs, which have diodes based in carbon, rather than today’s more expensive silicon. These lights would be so efficient that they could be powered for decades on a single small battery, and could be produced on flexible plastic sheets capable of being hung virtually anywhere.

Early prototypes of these sheets are being developed at the College of Nanoscale Science and Engineering at the State University of New York in Albany. Paul Tolley, the program’s director, says that OLED-based panels are groundbreaking in part because they don’t require a socket. "You no longer have to adapt what you’re building for that space," he says. "Instead, you’ve got limitless possibilities; it really changes how we look at everything related to lighting."

Ironically, innovations like OLEDs may be adopted first in the Third World, where existing infrastructure like sockets doesn’t need to be widely replaced—although Tolley does predict that already-wired places like the U.S. and Europe will catch up.

After OLEDs, other technologies-like quantum dots, a nanocrystal whose ability to emit varying light colors can be fine-tuned based on the crystal’s size—are probably 20 to 30 years away, says Tolley, who notes that these will have even greater energy efficiency and flexibility. From there, he says, consumers will begin to see lighting more as "a series of modular applications, with lots of solutions—a series of niches, rather than a place where one particular technology dominates."


For now, expect incandescents to become harder to find. The 2007 act, if its block expires at the end of this year, mandates that 100-watt incandescents improve their energy efficiency by 25 percent between 2012 and 2014, a goal so close to impossible that most manufacturers won’t even try. Although some bulbs are exempt—those under 40 watts, three-way bulbs, appliance and other specialty bulbs—the same mandate would apply to 75-, 60-, and 40-watt bulbs over the next three years. Manufacturers also have the global situation to keep in mind: full or partial incandescent bans are now in effect in much of the world, including the European Union.

Bulb companies are already rapidly switching over to LED production, although CFLs could theoretically make a comeback because they’re significantly more affordable. Hammer is working on cleaner, more versatile CFLs with a Chinese company called TCP that went public in the U.S. in April 2012. A company called VU1 is offering bulbs using what it calls Electron Stimulated Luminescence (ESL), a technology that is similar to CFLs but contains no mercury. And Philips is offering a slightly less efficient version of its L-Prize-winning LED bulb for about $25.

Technology made inevitable through regulation isn’t ideal, says Siminovitch, who adds that if such rule-making were needed, he’d prefer to see the traditional socket banned instead, which would set things in motion very quickly. Will that happen? "Absolutely not," he says. The revolution is definitely coming, he predicts, "but slowly."

Dan Koeppel is a writer specializing in science, technology, nature, and the outdoors. His work has appeared in Wired, Popular Mechanics, Popular Science, and The New York Times.

The following securities were not held by the T. Rowe Price Science & Technology Fund, the T. Rowe Price Global Technology Fund, the T. Rowe Price New Era Fund, or the T. Rowe Price New Horizons Fund as of March 31, 2012: General Electric, Philips, Home Depot, Hewlett-Packard, TCP Capital Core, and Vu1. The manager’s views and portfolio holdings are historical and subject to change. This material should not be deemed a recommendation to buy or sell any of the securities mentioned.

T. Rowe Price and Dan Koeppel are not affiliated.

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